January 29, 2010

China dairy industry revenue to grow over 20% in 2010

Industry players appear optimistic that China's dairy sector will grow by more than 20% this year, measured in terms of revenue.

Urbanisation and rising rural incomes have provided support to the dairy sector, with the global financial crisis having had little impact, said Jin Biao, vice president of dairy producer Inner Mongolia Yili Industrial Group Co.

The sector maintained 20-30% growth for much of the past decade until the melamine scandal in 2008, which slowed sales growth to about 5%, according to the Dairy Association of China.

In the first 11 months of 2009, dairy industry sales rose 13.6 percent on-year to RMB145.7 billion (US$21.34 billion), with profits jumping 104.5% to RMB8.2 billion, the association said.

Yili said on January 20 that it expects to have booked a profit in 2009, turning around from a loss of RMB1.7 billion in 2008. The company had operating revenue of RMB19.2 billion in the first nine months of 2009.